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Updated: September 16, 2012 14:10 IST

It takes ‘courage and some risks’ to break policy logjam, says PM

  • Ashok Dasgupta
  • B. Muralidhar Reddy
Comment (46)   ·   print   ·   T  T  
ALLY'S REVOLT: West Bengal Chief Minister and Trinamool Congress leader Mamata Banerjee leads a rally in Kolkata on Saturday to protest against the Centre's decison to revise diesel price and allow FDI in multibrand retail. Photo: Arunangsu Roy Chowdhury
The Hindu
ALLY'S REVOLT: West Bengal Chief Minister and Trinamool Congress leader Mamata Banerjee leads a rally in Kolkata on Saturday to protest against the Centre's decison to revise diesel price and allow FDI in multibrand retail. Photo: Arunangsu Roy Chowdhury

Opposition calls nationwide protest for Thursday

Despite the vociferous demands of the Opposition and UPA coalition partners including the Trinamool Congress for rolling back the diesel price hike and the decision on foreign direct investment in multibrand retail, Prime Minister Manmohan Singh on Saturday appeared to be in no mood to buckle under pressure.

Hours after Dr. Singh utilised the Planning Commission platform to assert the resolve of his government to stay on course, the Opposition gave a call for a nation-wide protest on September 20.

At the full Planning Commission meeting, convened here under his chairmanship to approve the 12th Plan approach document with a lower growth target of 8.2 per cent for the five-year period, the Prime Minister countered criticism against the big bang reforms unveiled in the last two days.

Dr. Singh asserted that it would take “courage and some risks” to break the policy logjam while strongly arguing in favour of higher FDI and FII inflows.

Justifying the economic need for the hike in diesel price, he pointed out that rational energy pricing was critical especially when “our energy prices are out of line with world prices.”

Fiscal deficit

The Prime Minister said FDI in retail, aviation and other sectors was necessary to bridge the widening fiscal deficit and contain the current account deficit at 2.9 per cent of the Gross Domestic Product.

“This must be financed mainly through Foreign Direct Investment and Foreign Institutional Investment flows so that reliance on external debt is limited.” FDI would come only if fiscal deficit was under control and the growth momentum regained, he argued.

However, the Opposition, stepping up its attack on the government, announced the nationwide agitation. Eight parties including the Left, and the National Democratic Alliance made separate announcements.

In a statement, the eight parties said it was time for people to come together and register a powerful protest to stop “measures which will further burden the people and ruin their livelihood.”

It was signed by Samajwadi Party president Mulayam Singh Yadav, Janata Dal (S) president H.D. Deve Gowda; CPI(M) general secretary Prakash Karat, CPI general secretary S. Sudhakar Reddy, BJD chief Naveen Patnaik, TDP president N. Chandrababu Naidu, AIFB general secretary Debabrata Biswas and RSP general secretary T.J. Chandrachoodan.

Call early polls: Advani

The tone and tenor of NDA working chairman L.K. Advani, who briefed the media after a meeting of the alliance leaders, was belligerent. He went to the extent of saying if the government did not feel compelled to reverse its decision despite all-round protests it would be wise for the UPA to call an early election and let the people decide.

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We now understand through some of the pro-walmart friends here that Walmart is coming to India to strengthen Indian economy. We must appreciate Walmart and must feel grateful and obliged to Walmart.

from:  R. Nadaraasan
Posted on: Sep 17, 2012 at 13:54 IST

as you can see from all the comments,there are 2 sets of opinion re FDI in retail market-let us leave aside the intentions and/or gains of the politicians- I am using the word politicians because I know that power corrupts-yes, now unto our topic.......please do not mix up these 2 issues;the recent hike in fuel price etc. with FDI matter.......the fundamental question to my mind is about legitimacy,whether this or any govt has,to push through such gigantic decisions without taking the people into confidence ???

from:  Lokesh Roy
Posted on: Sep 17, 2012 at 10:06 IST

A point ,missed by many, is that the FDIs will hand over the CONTROL
over the Indian Rupee, from the RBI to the Foreigners. Already FIIs are
When a nation fails to CONTROL her CURRENCY she is doomed.
FDI has many other drawbacks too,like Political price etc.. And an
Economy based on FDIs and the Stock Markets[it should the
reverse,actually] is really very weak...

from:  Sadasivan
Posted on: Sep 16, 2012 at 20:47 IST

Opposing for the sake of opposition is very unfortunate. We must remember what has happened to our Economy after India joined the bandwagon of Globalization. FDI in telecom,bank, financial service industry and many other sectors has helped the domestic companies go stronger and now we have our own MNCs who are expanding their businesses all over the world. Remember, Tata buying JLR, Bharti Tele expanding its operations in other Continents, Tata Steel buying Corus,Hindalco buying Novalis, Ranbaxy buying pharma companies in Europe and many more examples are out there to prove that our domestic companies grew stronger under the open business regime rather than being devoured by big MNCs as many feared that time. You can not pick roses and reject the thrones. The thrones are the challenges which will spur our own domestic retail giants to grow bigger. We must have FAITH in ourselves and our Companies. The lot of farmers will benefit a lot. Consumer will benefit from competition.

from:  Kameshwar Prasad
Posted on: Sep 16, 2012 at 20:03 IST

"We have to bite the bullet. If we have to go down, let us go down fighting" ... Oh dear Manmohanji ... the country expects you to fight for self-reliance ... please do not feel proud to fight against Indians for the cause of American bosses!! They will drown the people and you will also be lost. I think India has done a great mistake by handing over power to the pensioners of the World Bank and IMF ...

from:  FRANCIS
Posted on: Sep 16, 2012 at 20:02 IST

Where was this courage and risk taking some time back? I guess he got
some push from US. Anyway, some decisions are better than no-decision.

from:  Jayan
Posted on: Sep 16, 2012 at 19:38 IST

Its a stereotype opinion walmart is going to ruin other business, you have to see that the
current companies have no wage declaration ,quality assurance, expiry date and return
policy.Having plenty of walmart can cause harm having a few in just major cities creates a
competition to lower prices.It is completely wrong to compare what happened in us to india,
walmart grew out of proportion

from:  Vcikram
Posted on: Sep 16, 2012 at 18:39 IST

It is not the courage that works now. It is the risk or cunning that
works with the Prime Minister. He knows perfectly well his Ministry
will not fall even Mamatha withdraws her Minister. Karunanidhi,
Mulayam and Mayavathi are there to support the Govt. Prime Minister
knows all these people will only bark but not bite. Even Mamatha will
give outside support. Manmohan Singh and his mentor Sonia knows this
very well. The offer to DMK is two berths in the Ministry, increased
financial allotment of funds to UP and Bengal will satisfy Mulayam and
Mamatha and withdrawal of CBI cases against Mayavathi will please her.

from:  K. Sanckar
Posted on: Sep 16, 2012 at 16:58 IST

Big box retails like Walmart have faced opposition in the countries of their origin too. The documentary "Wal-Mart: The High Cost of Low Price" shows how employees, suppliers, local businesses and the communities were unhappy with Walmart's business practices in the USA.

They will get benefits from the governments in the form of cheap land and other concessions which small retailers do not get even in India. They will import most of their goods from China. Once the competition is weakened the consumer and producer surplus will be squeezed in my monopolistic practices. Opposition from small retailers is well justified.

from:  Aditya Singh
Posted on: Sep 16, 2012 at 15:22 IST

Am surprised, can any economist certify that this decision will help indian public? Its a hoax.
The prime minister of this country is behaving like an agent of US. Looks like the decision will
improve US economy not our economy. When a lot of inefficiencies of government have
been over looked. What about coal ? What about spectrum? Jus not able to understand what
this govt has done to control inflation? Now the IT bubble is burst how are we going to mind
our affairs. This government is an outsourced govt. US has provided all the ground work for
this. Should we end up as stooges to US?

from:  Rajamani
Posted on: Sep 16, 2012 at 15:08 IST

I have no problem with the increase in fuel costs since I agree that a persistent subsidy in this respect is simply infeasible and economically very damaging. However, my major concern is that the policy decisions related to FDI are simply an eyewash. The government intends to sweep under the carpet the fact that its record of ACTUAL DELIVERY of infrastructure development, education, health, you name it, is an unmitigated disaster. It does not matter what one's policies are if they cannot be implemented sedulously with due diligence and efficiency, focussing on efficacy. This requires discipline, and the only discipline we have consistently seen from the UPA is the indiscipline related to stealing from the public exchequer whether it be the 2G, Commonwealth Games, or coal scams, to name the best known ones. Do I hear the "zero loss" bugle once more? Unfortunately, the other parts of the political class also leave much to be desired.

from:  Samir Mody
Posted on: Sep 16, 2012 at 14:54 IST

A lot of people seem to be misinformed about FDI in retail. This is a welcome move that will increase the earnings of poor farmers by reducing the distribution overheads and paying them directly. Distributors and shop owners may be affected but they are relatively richer compared to poor farmers who are in the below poverty line category. Ultimately, consumers will benefit because 20% of India's agricultural produce is currently wasted and that wastage will be reduced by introduction of better storage and refridgeration technology. Thus, food prices will also come down.

from:  Shankar
Posted on: Sep 16, 2012 at 14:36 IST

Il Duce steals thunder from under M M Singh in selling India to the
MNCs.After all Il Duce is a foreigner and has just returned
after,"medical check up"...

from:  Sadasivan
Posted on: Sep 16, 2012 at 14:12 IST

Congress wants its alliance partners' strength in parliament to run the government. Alliance partners want the congress' performance to boost their popularity with people. It seems Congress has decided to go alone in the ensuing elections. The alliance partners are not bound to congress on the matter of principle/policies but to share power, hence they will toe congress line unless they realize and come to the conclusion,like Babu Jagjivan Ram did in 1977, that Congress is sinking.

from:  mvrangaraajan
Posted on: Sep 16, 2012 at 13:23 IST

Hats of to PM for being decisive this time, he has now tried to come out of his shell and taken a bold decision which will revive our sluggish economy.There will be ruckus by the petty parties over this but he has very rightly mentioned that it takes courage to take decision.Retail is still more of a unorganized sector and hence poses a huge opportunity for employment generation and wealth creation. Likewise aviation has been reeling under pressure and on the verge of being insolvent , opening it up to foreign players will not only inject cash but also provide the best alternative to end users with better service and low cost. Bengal CM has learnt nothing from the past it seems , by being belligerent she may be able to appease some sections of her state but it holds no ground on national level, her already tarred image may reach to all time low and finally at nadir later. On the other hand congress must get the credit for finally breaking the impasse and redeeming its pride .

from:  neeraj bhatt
Posted on: Sep 16, 2012 at 13:20 IST

100% support for all the new reforms. Congrats to the Govt. for its
courage. I request Trinamool and other allies to back the Congress.

from:  Gayathri
Posted on: Sep 16, 2012 at 13:07 IST

The Prime Minister has acted in the best interest of the country. Parties creating an issue out of this are clearly working with a political agenda or do not understand economics. India needs 'growth', and such bold measures are required for this. Opposition parties need to bring in 'Constructive Criticism' (Childhood Civics lesson)and not oppose everything.

from:  S Logi
Posted on: Sep 16, 2012 at 12:53 IST

Opening up retail is giving some pennies in one hand and taking away hundreds of dollars from other hand. Then foreign retail has huge consequences in Indian commodity market and consumer buying pattern. Indian govt has shown poor regulating ability in other industries, with foreign retail the issue will be more serious. It seems govt is giving itself up to overseas bullying, unfortunate the people of this country have no word in this.

from:  Vinay
Posted on: Sep 16, 2012 at 12:30 IST

@ S Raju How is allowing a foreign company to invest in Indian economy equivalent to allowing them to enslave us? Opening up trade will result in more employment opportunities and better products at lower prices. In a free market, there is no oppression or slavery. If a consumer does not like their product, they need not buy those products. If an employee does not like the wage or working conditions, that employee can quit. I normally don't support UPA for their corruption scandals, but in this issue, I support them.

from:  Shankar
Posted on: Sep 16, 2012 at 12:16 IST

..Yes ,our PM is courageous enough to take bold decisions like increasing Diesel Prices ,Petrol prices ,limiting LPG cylinder usage for common man ,etc. But ,why is not showing the same courage with respect to recovering Swiss Black Money invested in it by our high profile people, confiscating ill-earned money at the cost of our National Economy lost due to 2-G Scam ,Common Wealth Game Scam ,Ill-Legal mining ,Coalgate Scam etc.Can he do it with courage for the cause of this Great Nation which has given him the highest office and because of which he is respected and protected .

from:  Prof.R.krishnamurthy
Posted on: Sep 16, 2012 at 12:11 IST

It's the little towns /villages that are suffering from the inflation and price increase. The huge outfits like Walmart do not have population levels in these places to justify their existence in these areas. The city folk, may cry about rising prices claiming they will have no money for food. They are JOKING! Every individual one sees interviewed on TV is fat and overweight and would actually BENEFIT from not eating for at least one month! At the same time we are at the mercy of unscrupulous traders who no matter how low the wholesale prices go, keep upping the price of commodities to subsidize their greed and lack of love for their community. If WalMart axes these greedy pigs, it would be a good thing. Oats/cornflakes for example cost less in the U.S. than in India. if an item is priced low in the city by Walmart, it will be priced the same in the village. However government should insist FDI profits remain in the country to the max or India will become poorer on the global scale.

from:  angela alvares
Posted on: Sep 16, 2012 at 11:46 IST

Decision of Prime minister to open up retail and civil aviation including disinvestment of few public companies has diluted the hold on National Defense, food,aviation, logistics and communication are not lesser than a shield of Armour. While army takes care of external latter takes care of immunity of our own financial system and economy. With no policy nor strict controlling agency available to overlook the FDI and its consequences PMO should not ascertain farm arctictecture will be improved. Govt can build the best retail units on own and can employ all it says about retail benefits. Its time to take on govt which is willfully declining the debate as to show itself up for corporate. Not less any adventure to open up FDI has landed in scams of lakh croers and fame of country has shattered. Build a big retail chain of Indian Govt open up branches in US OR UK than see how good they welcome it or else put a full stop to ur quest for money.

from:  Achchut A J
Posted on: Sep 16, 2012 at 11:33 IST

People are fully confused in the term, FDI in retail. They think the local people will suffer, and farmers will go into losses. But all should also know that it takes extraordinary effort for companies like Walmart and Metro to establish themselves and succeed in India. It is not easy to setup a typical US style stop in a congested city of india. I think this will bring competition to the local markets too. People please dont get confused, when Walmart went into Germany they werent successful and they had to pull off in a few years.

from:  alagurajan karunakaran
Posted on: Sep 16, 2012 at 11:20 IST

The decision of FDI in retail is undemocratic. When it was clear to the government last time around when it tried to take this decision how much opposition existed to FDI in retail they should not have gone ahead with it. The current government may very well survive because of political horse trading with its allies but democracy has lost, when a government with only 30% of the votes cast has taken such a fundamental decision at the behest of foreign governments and corporate interests.

from:  Aditya Singh
Posted on: Sep 16, 2012 at 11:02 IST

sir, India remains a traditional society because of lack of education and lack of proper debate on serious issues in media. we, means majority, are still a society for status quo. we instantly oppose any change.remember introduction of cooking gas and pressure cooker, big dams and recently the issue of globalization. people use to say that cooking gas is harmful. regarding pressure cooker the general perception was that there is no taste in cooker food and traditional chulha cooking is more tasteful and healthy. big dams are still considered bad for culture and environment. globalization, a stage in human development, was opposed because USA was considered behind it. but our society is reluctantly accepting these changes. The issue of fdi in retail should be understood in this background. The supporters of fdi in retail as well as the union government and the congress party are not able to articulate their views. There is need to discuss better safeguards not blind opposition.

from:  R. Pandya
Posted on: Sep 16, 2012 at 09:51 IST

Sir, We fully support our PM's stand and decry the stand taken by both BJP and Mamta Bannerjee stand in this matter.

from:  c.g.venkatesan
Posted on: Sep 16, 2012 at 09:51 IST

It took more than a century to drive out foreigners ruling the country who came here as traders. Now we are recalling them back in the form of FDI without which our economy seems to be suffering, thus financially surrendering to foreigners. It will not take much time to transform this into political surrender. Is this called reform? Is this the meaning of phrase 'history repeats itself'? Time to think more

from:  S Raju
Posted on: Sep 16, 2012 at 09:43 IST

Open up aviation, but not retail for now. Currently Aviation would benefit by new capital and modernization. But when retail changes to big box stores like Walmart, it turns whole market regions into deserted ghost towns - like happened all over US. True consumers will get a slightly lower price on most items, but this kind of change will work only when the rest of the economy is developed (like they did in the US). Bringing in big box stores should be done then. Else it would lead to stagnation of retail, and economy.

from:  Arvind
Posted on: Sep 16, 2012 at 08:53 IST

Good step right direction. States against this policy step,need not implement. Perfect. The retail sector would churn the economy, create jobs infuse fresh technology. It would also mean savings from lesser food wastage for example. Of course MNC retailers want to make money - but at least they would do so by creating jobs and in a honest way. Retail is not always very profitable business. Many large retailers have exited markets, case in point is the exit of Carefore from Singapore (a retailers paradise). Common man would benefit from cheaper goods of international quality. Young people would find employment in the retail stores and in the supply chain. Vested interests always protest such moves. Remember protests against computerization, liberalization in the telecom sector in the 1990s or the insurance sector. In the insurance sector many MNCs came - but are they making money? Most are planning a quick and quiet exit. No one can make windfall profits in an open market economy.

from:  shekhar
Posted on: Sep 16, 2012 at 08:35 IST

The origin of the policy of economic liberalisation started with bribery of JMM MPs led by Guruji of present day Jharkhand.Then came various scams including defence sectors,about which not much is in public domain due to OFFICIAL SECRETS ACT.But all major procurements of defence are full of scams out of public knowledge.Think of Bofors,Coffin scam,procurement of ammunitions after end of war and so on!See how retired senior defence officials are becoming millionairs after retirements.Now this architect of such economic terrorism is playing the role of a messiah!

from:  atis
Posted on: Sep 16, 2012 at 07:41 IST

It is the courage of a gambler that the PM is now displaying. I think it's too late and damage has already been done. The Congress doesn't stand to gain any additional votes by introducing reforms now, as its effects will be seen only after a time-lag. The immediate repurcussions are loss of vote-share and credibility as the coalgate issue gets unravelled in the coming months.

from:  Pramod Patil
Posted on: Sep 16, 2012 at 07:20 IST

At last the PM has rediscovered his long lost courage to act.But he has failed to understand his sudden show of courage will land India in economic disaster.Giving free hand to Walmart and their likes,if their worldwide reputation is taken into account,will land India in insurmountable economic dependency if not political.

from:  Anil Kumar Choudhury
Posted on: Sep 16, 2012 at 07:04 IST

Nobody likes a fuel prices hike, anymore than any one would like a tax rise. Yet everyone wants subsidized fertilizers, food, fuel, housing, transport and anything more that can be added on. And that in a country that claims to have 250 million people in the "middle income" bracket of earning at least Rs. 6 lakhs per annum, often with both husband and wife working, with burgeoning sales of high-end mobiles, LCD TVs, larger cars, 3-bedroomed flats. There is always the Dearness Allowance adjustment in salaries and pensions, especially of employees in the central and state governments. And we have to import 60% of out crude oil requirements to meet our demand. It is time we - politicians included - faced reality.

from:  Prosenjit Das Gupta
Posted on: Sep 16, 2012 at 06:48 IST

You hate it or Love it, Dr.Manmohan singh is the best Prime Minister of
India. He is a real Singham, a man of perseverance .

from:  aditya
Posted on: Sep 16, 2012 at 06:31 IST

The American experience with Walmart is not a happy one. The employees in Walmart are not paid well. Their social security cover is very deplorable. So, FDI in retail will not benefit workforce.

Besides, Walmart will crush business enterprises and dictate terms to them. Already the retail chains in India do not stock the products of all the manufacturers.The visitors are made to choose from whatever is available in the mall or to go to some other shop to buy the product of their choice.

With walmart India will see many manufacturing enterprises also closing down.

Manmohan is a Prime Minister to carry out the wishes of the people. But, he carries out the wishes of Obama.

He must know the fact that more employment opportunities were available in the soft-drinks sector before the entry of Coke and Pepsi or after the entry of Coke and Pepsi. These companies do not just compete in an open manner. They crush out their rivals by pressuring the retail outlets not to sell their products.

from:  R. Nadaraasan
Posted on: Sep 16, 2012 at 06:28 IST

India should not open retail, but should open aviation.

Currently Aviation would benefit by new capital and modernization.

But when retail changes to big box stores like Walmart, it turns whole market regions
into deserted ghost towns - like happened all over US. True consumers will get a
slightly lower price on most items, but this kind of change will work only when the
rest of the economy is developed (like they did in the US). Bringing in big box stores
should be done then. Else it would lead to stagnation of retail, and economy.

from:  Arvind
Posted on: Sep 16, 2012 at 06:19 IST

I am glad that PM Singh finally took the steps that are so necessary to revive growth and modernize Indian economy. I hope Madam Gandhi would back up PM Singh when the political push comes to shove.

from:  Joyjit Dutta
Posted on: Sep 16, 2012 at 05:22 IST

What it takes, is a trusted Government who commands the respect of the nation with the full
acknowledgement by the people that the actions taken by the Government is for the good of
the country and it's people. Any opposition who stands against it will be in the political
wilderness for a along time. The question is then, does the Government has what it takes!?

from:  Saratchandran
Posted on: Sep 16, 2012 at 05:10 IST

Perhaps for the second time during his eight-year tenure as Prime Minister, Dr.Manmohan Singh has decided not to yield to undue pressure from the supporting allies. On the first occasion, the leftists opted to withdraw their outside support. Yet, getting requisite support from some unexpected quarters, the government managed to survive. At the moment, the threat of withdrawal of support is from Trinamool Congress, the second largest ally in the UPA, which has demanded rolling back of the diesel price hike and the cabinet decision on FDI in multi-brand retail. It has been wisely said that cowards die many times before their death. Dr.Singh can pay heed and do needful for redressing genuine grievances but needs to be courageous, assertive and vociferous when needed. Prices cannot remain static for ever and policies cannot remain stagnant. What needs to be ensured is reasonableness in the actions taken and that they are in national interest. Corruption has to be eliminated.

from:  K.D.Viswanaathan
Posted on: Sep 16, 2012 at 03:08 IST

Great statement from a scholar ! YES it takes a lot of courage to be a slave under foreign madam and face risks of name change from Manmohan to MownNoGun singh! Please show your guts to uncover all black money stacked abroad in name of many politicians and bring it back for economy to be energised; then we will accept you as a real Sardarji - !!!

from:  Radhik Hairam
Posted on: Sep 16, 2012 at 02:41 IST

There is no policy logjam.

Prime Minister is incapable of eradicating corruption.

He is a silent spectator, giving legitimacy to those around him in siphoning out
money out of the country.

He was taken aback when corruption was exposed and his incapacity laid threadbare.

He now likes to wield a magic wand of FDI, to appease the middle classes, and light a
lamp in the air.

He not only is incapable but is shameless and spineless, and would sell away India,
to foreign corporations.

Posted on: Sep 16, 2012 at 02:03 IST

Finally, the government is taking some action to revive economic growth. It looks as if the cautious Pranab Mukherjee was the one impeding the necessary measures these last few years, as Finance Minister, along with Mamata Banerjee, whose focus is very narrow and who appears to have been heavily influenced by the old left.
There is a broad consensus on economic policy across parties (including the sensible Bengal wing of the CPI-M and excluding the Trinamool and part of the JNU economics department). Why is the BJP opposing something they would have pushed for if they had been in government? Likewise for Jayalalitha, Chandrababu Naidu, Akhilesh Yadav and Deve Gowda.

from:  kalyanc
Posted on: Sep 16, 2012 at 01:47 IST

Fools rush in where angels fear to tread.

from:  Mohanraj
Posted on: Sep 16, 2012 at 01:31 IST

The Prime Minister knows that his government is on its last leg. He is therefore doing
everything possible to bolster his personal reputation abroad and to a lesser extent in India
as a reformer of the country's economy. He doesn't care if the people do not approve of his
reform. He has never gone nor will he ever go In future to the people for their votes. So why
should he care? But how about his party? Well,that is the party's business, isn't it?

from:  K.Vijayakumar
Posted on: Sep 16, 2012 at 01:12 IST

Definitely Mr. PM, It takes a world lot of courage to keep taking foolish steps when you are nose deep in trouble. We agree. But then UPA is a party of strong leaders like Raja, Kalmadi etc. etc. ....

from:  Rahul
Posted on: Sep 16, 2012 at 00:44 IST

It is an act to sell India to his Western
Masters,holding Indians in utter contempt,repeatedly.
Il Duce is also doing the same and is similar.

from:  Sadasivan
Posted on: Sep 16, 2012 at 00:27 IST
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